Federal Register / Vol. 63, No. 135 /Wednesday, July 15, 1998 / Notices 38219

investment company may purchase

shares of a broker-dealer firm to reward

it for selling shares of the investment

company.

Applicants assert that their proposal

does not raise this concern because

units of the Trusts are sold almost

exclusively by the Sponsors and the

Trusts will not purchase shares of the

Sponsors or other underwriters for the

Trusts. The Sponsors estimate that, over

the past year, both in the primary and

secondary markets, over 99% of all unit

sales for the Trusts were made by the

Sponsors. Applicants also state that the

balance of sales generally are made by

a few regional brokerage firms as

dealers, that these firms are not

members of the underwriting group and

that no special incentives are paid to

these dealers to induce sales of Trust

units.

5. Another concern underlying

section 12(d)(3) was that an investment

company may direct brokerage to a

broker-dealer in which it has invested to

enhance the broker-dealers’ profitability

or assist it during financial difficulty,

although the broker-dealer may not offer

the best price and execution. Applicants

assert that their proposal does not raise

this concern because, as a condition to

the requested relief, the Trusts will not

rely on the order to purchase securities

of any issuer that executes portfolio

transactions for the Trusts. Applicants

also note that the Trusts, as unmanaged

vehicles, do not engage in portfolio

transactions with the same frequency or

purpose as managed investment

companies.

6. Section 12(d)(3) also was designed

to prevent the practice of a broker-dealer

giving advice to its customers regarding

which investment company to invest in

based on whether the investment

company has invested in the brokerdealer; thus using the investment

company’s assets to boost the price of

the broker-dealer’s securities.

Applicants assert that the concern about

purchases by a Trust affecting the price

of the issuer’s securities is not present

in the proposed arrangement because a

Trust does not actively trade its

portfolio securities.

Applicants’ Conditions

Applicants agree that the order shall

be subject to the following conditions:

1. The debt obligations and nonvoting preferred stocks held by a Trust

relying on the order will be rated

investment grade by a nationally

recognized statistical rating organization

or be of comparable quality at the time

of their initial deposit.

2. The common stocks held by a Trust

relying on the order will be listed on a

nationally or internationally recognized

securities exchange or market at the

time of their initial deposit.

3. No company whose securities

constitute more than 5% of the total

assets of the portfolio of a Trust relying

on the order nor any affiliate thereof

will act as broker for any purchase or

sale of any portfolio security for any

Trust relying on the order.

4. No Trust relying on the order will

invest more than 5% of its total assets

as of its initial date of deposit in the

securities of any company that, to the

knowledge of the Sponsors, has sold, or

whose affiliate has sold, units of any

other Trust within one year preceding

such initial date of deposit.

5. No company whose securities

constitute more than 5% of the total

assets of the portfolio of a Trust relying

on the order nor any affiliate thereof

will, for a period of at least one year

after the date of the last deposit into the

Trust, act as an underwriter of the units

of any other Trust or be permitted to

acquire any such units directly from a

Sponsor.

6. With respect to any securities

acquired in reliance on the order, such

securities will be acquired only in the

secondary market and not as part of any

offering by the issuers thereof.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18842 Filed 7–14–98; 8:45 am]

BILLING CODE 8010–01–M

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[Rel. No. IC–23307; 812–11122]

EuroPacific Growth Fund, et al.; Notice

of Application

July 9, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) for relief from section 2(a)(19) of

the Act.

SUMMARY OF APPLICATION: Applicants

request an order under section 6(c) of

the Act declaring that a director on the

boards of certain registered investment

companies who also is an outside

director for the parent company of a

registered broker-dealer, will not be

deemed an ‘‘interested person’’ of the

registered investment companies.

APPLICANTS: EuroPacific Growth Fund

(‘‘EUPAC’’), the New Economy Fund

(‘‘NEF’’), New Perspective Fund, Inc.

(‘‘NPF’’), SMALLCAP World Fund, Inc.

(‘‘SCWF’’), The Investment Company of

America (‘‘ICA’’) (collectively, the

‘‘Fund’’); Capital Research and

Management Company (‘‘Capital

Research’’); and American Funds

Distributors, Inc. (‘‘AFD’’).

FILING DATES: The application was filed

on April 29, 1998.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

August 3, 1998, and should be

accompanied by proof of service on

applicants, in the form of an affidavit,

or, for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicants: 333 South Hope Street, Los

Angeles, CA 90071–1447.

FOR FURTHER INFORMATION CONTACT:

Mary T. Geffroy, Senior Counsel, at

(202) 942–0553, or Mary Kay Frech,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee from the SEC’s

Public Reference Branch, 450 Fifth

Street, N.W., Washington, D.C. 20549

(tel. (202) 942–8090).

Applicant’s Representations

1. Each of the Funds is an open-end

management investment company

registered under the Act. EUPAC and

NEF are Massachusetts business trusts.

NPF and SCWF are Maryland

corporations. ICA is a Delaware

corporation.

2. Capital Research, an investment

adviser registered under the Investment

Advisers Act of 1940, serves as

investment adviser to the Funds and

certain other registered investment

companies. The Funds and these

investment companies, together with

any future registered investment

company advised by Capital Research,

are referred to as the ‘‘American

Funds.’’ AFD, a wholly-owned
38220 Federal Register / Vol. 63, No. 135 /Wednesday, July 15, 1998 / Notices

1 In 1996, Mr. Kling’s aggregate compensation

from Irwin Financial was approximately $16,000.

As a non-employee director, Mr. Kling also

participates in Irwin Financial’s mandatory and

non-mandatory stock options plans. In April 1997,

Mr. Kling was granted 400 stock options, 100 of

which are currently vested. The exercise price of

the options is $23.375 per share. The market value

of Irwin Financial’s common stock as of the close

of trading on February 26, 1998 was $47.25 per

share. In addition, as of March 11, 1997, Mr. Kling

beneficially owned 3,404 shares, or approximately

0.03%, of Irwin Financial’s common stock, with

market value on February 26, 1998 of

approximately $160,839. The applicants represent

that Mr. Kling’s ownership of Irwin Financial’s

common stock is not material to Mr. Kling since it

does not represent a material portion of his

financial holdings generally.

2This figure is based on Irwin Financial’s net

revenues in 1996.

3Applicants are not requesting relief from the

provisions of rule 12b–1(b)(2) that require a rule

12b–1 plan to be approved by the directors of an

investment company ‘‘who are not interested

persons of the company and have no direct or

indirect financial interest in the operation of the

plan or in any agreements related to the plan.’’

Applicants state that they intend to treat Mr. Kling

as a director who meets these requirements, based

on Mr. Kling’s lack of material business or

professional relationship with Irwin Financial and

applicants’ belief that Mr. Kling’s ownership of

Irwin Financial’s common stock is not a material

portion of Mr. Kling’s financial holding generally.

Applicants represent that, should Mr. Kling develop

a direct or indirect financial interest in the

operation of the American Funds’ rule 12b–1 plans,

he will no longer be treated as meeting the above

requirements of rule 12b–1.

subsidiary of Capital Research, is the

principal underwriter of the Funds.

3. Each Fund has a board of directors

(‘‘Board’’), a majority of whom are not

‘‘interested persons’’ within the

meaning of section 2(a)(19) of the Act.

ICA and NPF also have advisory boards,

as defined in section 2(a)(1) of the Act,

whose members consult with Capital

Research and the Funds’ Boards.

4. William H. Kling serves as a

director of NEF, SCWF, NPF and

EUPAC, and as an advisory board

member of ICA. Mr. Kling’s principal

occupation is as President of Minnesota

Public Radio. Mr. Kling also is a nonemployee director of Irwin Financial

Corporation (‘‘Irwin Financial’’).1 Irwin

Financial is a bank holding company

that is primarily engaged in the

mortgage banking business. One of

Irwin Financial’s indirect wholly-owned

subsidiaries is Irwin Securities, a

broker-dealer registered under the

Securities Exchange Act of 1934 (the

‘‘1934 Act’’). Approximately 0.4% of

Irwin Financial’s net revenues comes

from Irwin Securities.2

5. Irwin Securities is a small firm. It

does not execute any portfolio

transactions for the Funds. Irwin

Securities provides de minimis

distribution services to the Funds. The

gross sales by Irwin Securities of Fund

shares during the period 1991 through

1996 was approximately $3.55 million,

or 0.003% of the total gross sales of

Fund shares by all broker-dealers for the

same period. The fees received by Irwin

Securities from the sale of Fund shares

for the past five years represented

approximately 0.017% of Irwin

Financial’s total net revenues. The

Funds have adopted plans pursuant to

rule 12b–1 under the Act and make

payments to their distributors, including

Irwin Securities, pursuant to those

plans.

Applicants’ Legal Analysis

1. Section 2(a)(19)(A)(v) of the Act

defines an ‘‘interested person’’ of a

registered investment company to

include any broker-dealer registered

under the 1934 Act or any affiliated

person of the broker-dealer. Applicants

state that Mr. Kling may be deemed an

affiliated person of Irwin Securities by

virtue of his position as a director of

Irwin Financial, an entity that controls

Irwin Securities within the meaning of

section 2(a)(9) of the Act. Because Mr.

Kling may be deemed an affiliated

person of Irwin Securities, Mr. Kling

currently is considered an interested

person of the Funds.

2. Rule 2a19–1 under the Act

provides, in relevant part, that a director

of a registered investment company will

not be considered an interested person

solely because the director is an

affiliated person of a registered brokerdealer, provided that: (1) the brokerdealer does not execute any portfolio

transactions for the ‘‘company

complex,’’ as that term is defined in the

rule, engaged in any principal

transactions with the company complex,

or distribute shares of the company

complex, for at least six months prior to

the time the director is to be considered

independent and for the period during

which the director continues to be

considered independent; (2) the

company’s board of directors finds that

the company and its shareholders will

not be adversely affected if the brokerdealer does not engage in transactions

for or with the company complex; and

(3) no more than a minority of the

company’s independent directors are

affiliated with broker-dealers.

Applicants state that they may not rely

on rule 2a–19 in determining Mr.

Kling’s status because Irwin Securities

provides de minimis services to the

Funds.

3. Applicants believes that, because

Mr. Kling’s affiliation with Irwin

Securities is solely the result of his

position as a non-employee director of

Irwin Financial, and because Irwin

Securities provides only de minimis

distribution services to the Funds, it

would be more appropriate to treat Mr.

Kling as an independent director.

Applicants thus request an order under

section 6(c) of the Act declaring that Mr.

Kling will not be deemed an interested

person under section 2(a)(19) of the

Act.3

4. Section 6(c) of the Act provides, in

part, that the Commission may exempt

any person from any provision of the

Act or any rule under the Act if and to

the extent the exemption is necessary or

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act. Applicants contend that their

request for relief from interested person

status for Mr. Kling meets this standard

because Mr. Kling’s relationship with

Irwin Securities is attenuated and poses

no real or potential conflict of interest

and because Irwin Securities’ only

business relationship with the Funds

involves a de minimis amount of

distribution services for the Funds.

5. Applicants state that, in his

position as a non-employee director of

Irwin Financial, Mr. Kling has no

authority or responsibility for the

operations of Irwin Securities and does

not control or influence the day-to-day

management of Irwin Securities.

Applicants also represent that Mr. Kling

has no material business or professional

relationship with Irwin Financial, Irwin

Securities, American Funds, Capital

Research, AFD or any affiliated person

of these entities.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief will be

subject to the following conditions:

1. All of the requirements of rule

2a19–1 will be met, except that Irwin

Securities will be permitted to provide

limited distribution services to the

American Funds;

2. No more than 1% of Irwin

Financial’s gross revenues will come

from the distribution of any one

American Fund’s shares; and no more

than 5% of Irwin Financial’s gross

revenues will come from the

distribution of all of the American

Funds’ shares;

3. No more than 1% of any one of the

American Fund’s shares, and no more

than 5% of all of the American Funds’

shares, will be distributed by Irwin

Securities; and

4. Irwin Securities will not serve as a

‘‘regular broker or dealer,’’ as that term
Federal Register / Vol. 63, No. 135 /Wednesday, July 15, 1998 / Notices 38221

1 15 U.S.C. 78s(b)(1).

2Securities Exchange Act Release No. 40045 (May

29, 1998), 63 FR 30543.

3For a more complete description of Direct

Clearing, refer to Securities Exchange Act Release

No. 32221 (April 26, 1993) 58 FR 26570 [File No.

SR–NSCC–93–03]

4The current version of NSCC Rule 31 was

approved by the Commission in 1996. Securities

Exchange Act Release No. 37631 (September 3,

1996), 61 FR 47534 [File No. SR–NSCC–96–08].

is defined in rule 10b–1 under the Act,

for any American Fund.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18762 Filed 7–14–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Issuer Delisting; Notice of Application

to Withdraw From Listing and

Registration; (Financial Federal

Corporation, Common Stock, $.50 Par

Value) File No 1–14237

July 9, 1998.

Financial Federal Corporation

(‘‘Company’’) has filed an application

with the Securities and Exchange

Commission (‘‘Commission’’), pursuant

to Section 12(d) of the Securities

Exchange Act of 1934 (‘‘Act’’) and Rule

12d2–2(d) promulgated thereunder, to

withdraw the above specified security

(‘‘Security’’) from listing and

registration on the American Stock

Exchange, Inc. (‘‘Amex’’ or

‘‘Exchange’’).

The reasons cited in the application

for withdrawing the Security from

listing and registration include the

following:

The Company submitted an

application to list the Security on the

New York Exchange, Inc. (‘‘NYSE’’) and

the NYSE approved such application.

The Company believes that listing the

Security on the NYSE will create better

visibility for the Company and its

securities, thus enhancing shareholder

value.

The Company has complied with

Amex Rule 18 by filing with the Amex

a certified copy of the resolutions

adopted by the Board of Directors of the

Company authorizing the withdrawal of

the Security from listing and registration

on the Amex and a statement from the

Company setting forth in detail the

reasons and facts supporting such

proposed withdrawal.

By letter dated June 12, 1998, the

Amex raised no objection to the

Company’s filing its application with

the Commission to remove the Security

from listing on the Amex.

Any interested person may, on or

before July 30, 1998, submit by letter to

the Secretary of the Securities and

Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549, facts

bearing upon whether the application

has been made in accordance with the

rules of the Exchange and what terms,

if any, should be imposed by the

Commission for the protection of

investors. The Commission, based on

the information submitted to it, will

issue an order granting the application

after the date mentioned above, unless

the Commission determines to order a

hearing on the matter.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–18841 Filed 7–14–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [63 FR 37608, July 13,

1998].

STATUS: Closed Meeting.

PLACE: 450 Fifth Street, N.W.,

Washington, D.C.

DATE PREVIOUSLY ANNOUNCED: July 13,

1998.

CHANGE IN MEETING: Cancellation of

Meeting.

The closed meeting scheduled for

Thursday, July 16, 1998, at 11:00 a.m.,

has been cancelled.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact: The Office

of the Secretary (202) 942–7070.

Dated: July 13, 1998.

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19047 Filed 7–13–98; 4:00 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40179; File Nos. SR–DTC–

98–09, SR–NSCC–98–05]

Self-Regulatory Organizations; The

Depository Trust Company; National

Securities Clearing Corporation; Order

Approving a Proposed Rule Change

Relating to Direct Clearing Services

and New York Window Services

July 8, 1998.

On May 13, 1998, The Depository

Trust Company (‘‘DTC’’) and the

National Securities Clearing Corporation

(‘‘NSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

proposed rule changes (File Nos. SR–

DTC–98–09 and SR–NSCC–98–05)

pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’).1 Notice of the proposals was

published in the Federal Register on

June 4, 1998.2 No comment letters were

received. For the reasons discussed

below, the Commission is approving the

proposed rule changes.

I. Description

Under the rule changes, NSCC will

discontinue its Direct Clearing Services

(‘‘Direct Clearing’’) and New York

Window Services (‘‘Window’’). DTC

will offer its participants most of the

services currently offered by NSCC

through Direct Clearing and the

Window through a new service called

the New York Window Services.

Direct Clearing is a physical securities

processing service which NSCC

provides to its participants that do not

have offices in New York City. The

principal services of Direct Clearing

include (i) processing over-the-window

receives and deliveries, (ii) processing

transfers of physical securities

certificates, and (iii) processing

deliveries to designated agents in

connection with reorganizations and

other corporate actions. In the course of

providing these and other Direct

Clearing services, NSCC may have

custody of participants’ physical

securities certificates including

overnight custody for one or more

days.3 The principal services of NSCC’s

Window are similar to those of Direct

Clearing, but they initially were

provided to NSCC participants located

in New York City. NSCC has decided to

discontinue providing Direct Clearing

and the Window in order to focus its

resources on its core businesses.

Under the rule changes, DTC is

adopting new procedures for the

operation of its New York Window

Services. DTC’s procedures for its New

York Window Services are substantially

the same as NSCC’s Rule 31 4 except

that DTC’s new procedures do not

include provisions similar to section 4

of NSCC Rule 31, which relates to

money settlement through the Window.

Currently, it is anticipated that NSCC

will discontinue providing Direct

Clearing and the Window and that DTC